INVESTMENTS 投资学 （博迪BODIE, KANE, MARCUS）Chap017 Macroeconomic and Industry Analysis.ppt

CHAPTER 17 Macroeconomic and Industry Analysis Sensitivity to the Business Cycle Interest is a fixed cost that increases the sensitivity of profits to the business cycle. Financial leverage: the use of borrowing Figure 17.10 A Stylized Depiction of the Business Cycle Sector Rotation Portfolio is shifted into industries or sectors that should outperform, according to the stage of the business cycle. Peaks – natural resource extraction firms Contraction – defensive industries such as pharmaceuticals and food Sector Rotation Trough – capital goods industries Expansion – cyclical industries such as consumer durables Figure 17.11 Sector Rotation Industry Life Cycles Stage Start-up Consolidation Maturity Relative Decline Sales Growth Rapid and increasing Stable Slowing Minimal or negative Figure 17.12 The Industry Life Cycle Which Life Cycle Stage is Most Attractive? Quote from Peter Lynch in One Up on Wall Street: Many people prefer to invest in a high-growth industry, where there’s a lot of sound and fury. Not me. I prefer to invest in a low-growth industry. . . . Which Life Cycle Stage is Most Attractive? …In a low-growth industry, especially one that’s boring and upsets people [such as funeral homes or the oil-drum retrieval business], there’s no problem with competition. You don’t have to protect your flanks from potential rivals . . . and this gives you the leeway to continue to grow.” Peter Lynch in One Up on Wall Street Industry Structure and Performance:Five Determinants of Competition Threat of entry Rivalry between existing competitors Pressure from substitute products Bargaining power of buyers Bargaining power of suppliers INVESTMENTS | BODIE, KANE, MARCUS INVESTMENTS | BODIE, KANE, MARCUS Copyright ? 2011 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin A firm’s value comes from its earnings prospects, which are determined by: The global economic environment Economic factors affecting the firm’s industry The posi